Private Credit Turmoil Hits Blue Owl, Apollo Global and Ares As Their Stocks Sink – Apollo Global Managem
Private credit stocks continued their downward trend last week after Morgan Stanley (NYSE:MS) became the latest company to restrict investor withdrawals.
Top Private Credit Stocks Have Plunged This Year
This crisis started mid-last year when some prominent investors started to question private credit valuations as interest rates rose. This included people like Jeffrey Gundlach and Jamie Dimon, which led to more redemptions from investors.
The issue escalated when Blue Owl proposed merging Blue Owl Capital Corporation (OBDC) and Blue Owl Capital Corporation II (OBDC II), sparking backlash from investors, as the latter would have faced a 20% haircut. After abandoning the merger proposal, the company decided to cap withdrawals and sell about $1.4 billion worth of loans at 99.7% of par value.
Analysts Expect Private Credit AUM to Hit $3.4 Trillion by 2030
Analysts also anticipate that private credit stocks will remain under pressure in the short term before bouncing back later. For example, Benzinga data shows that the consensus target for Blue Owl stock among analysts is $17.3, much higher than the current $8.57. Apollo’s target is $148, up modestly from the current $118, while Are’s target is $166.
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